Posts Tagged ‘time’

Debunking 8 Myths About Technical Analysis

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Some traders and investors denounce technical analysis (TA) as a superficial study of charts and patterns without any concrete, conclusive or profitable results. Others believe it is a sort of Holy Grail that once mastered will unleash sizable profits. These opposing viewpoints have led to misconceptions about technical analysis and how it is used.  

Technical analysis tries to capture market psychology and sentiment by analyzing price trends and chart patterns for possible trading opportunities. Contrary to fundamental analysis, technical analysts do not necessarily care much about the companies behind the stocks they trade or their profitability.

Some misconceptions about technical analysis are based on education and training. For example, a trader trained in using only fundamentals may not trust technical analysis at all. But that doesn’t mean someone who is trained in technical analysis can’t use it profitably.

Other TA assumptions are based on bad experiences. For example, the incorrect use of technical indicators often leads to losses. That doesn’t mean the method is necessarily wrong; possibly the person just needs more practice and training. The negative sentiment can be perpetuated by unscrupulous marketing, promising overnight riches if a simple TA indicator is bought and used. It rarely is that easy.

Here are eight common technical analysis myths—and why they simply aren’t true. 

Key Takeaways

  • Technical analysis (TA) tries to capture market psychology and sentiment by analyzing price trends and chart patterns for possible trading opportunities.
  • Many opponents of TA subscribe to myths about the strategy.
  • Common myths about TA include it being only for day trading and only used by individual traders.
  • Other myths include the idea that TA is quick and easy, with all decisions made by software.
  • Some erroneously expect TA to make precise price predictions and be equally appropriate across all financial markets.

1. Technical Analysis Is Only for Short-Term Trading or Day Trading

It is a common myth that technical analysis is only appropriate for short-term and computer-driven trading like day trading and high-frequency trades. Technical analysis existed and was practiced before computers were common, and some of the pioneers in technical analysis were long-term investors and traders, not day traders. Technical analysis is used by traders on all time frames, from one-minute charts to weekly and monthly charts.

2. Only Individual Traders Use Technical Analysis 

While individuals do use technical analysis, hedge funds and investment banks make ample use of technical analysis as well. Investment banks have dedicated trading teams that use technical analysis. High-frequency trading, which encompasses a significant amount of the trading volume on the stock exchanges, is heavily dependent on technical concepts. 

3. Technical Analysis Has a Low Success Rate

A look at the list of successful market traders, who have decades of trading experience, debunks this myth. Successful trader interviews have cited significant numbers of traders who owe their success to technical analysis and patterns. For example, Market Wizards: Interviews With Top Traders (Wiley, 2012) by Jack D. Schwager features interviews with many professionals who’ve profited solely by using technical analysis.

4. Technical Analysis Is Quick and Easy 

The internet is full of technical analysis courses that promise trading success. Though many individuals enter the trading world by placing their first trade based on simple technical indicators, continued success in trading requires in-depth learning, practice, good money management, and discipline. It requires dedicated time, knowledge, and attention. Technical analysis is only a tool, only one piece of the puzzle.

5. Ready-Made Technical Analysis Software Can Help Traders Make Easy Money 

Unfortunately, this is not true. There are many online ads for cheap and costly software that claims to do all your analysis for you. In addition, less-experienced traders sometimes confuse technical analysis tools in broker-provided trading software for trading models that will guarantee profit. Though technical analysis software provides insights about trends and patterns, it doesn’t necessarily guarantee profits. It’s up to the trader to correctly interpret trends and data.

6. Technical Indicators Can Be Applied Across All Markets

While technical analysis can be applied to many markets, specific asset classes have specific requirements. Equities, futures, options, commodities, and bonds all have differences. There may be time-dependent patterns like high volatility in futures and options nearing expiry, or seasonal patterns in commodities. Don’t make the mistake of applying technical indicators intended for one asset class to another.

7. Technical Analysis Can Provide Precise Price Predictions 

Many novices expect recommendations from technical analysts or software patterns to be 100% precise. For example, inexperienced traders may expect a prediction as specific as, “stock ABC will reach $62 in two months.” However, experienced technical analysts usually avoid quoting prices so specifically. Rather they tend to quote a range such as, “stock A could move in the range of $59 to $64 in the next two to three months.”

Traders betting their money on technical recommendations should be aware that technical analysis provides a predictive range, not an exact number. Technical analysis is also about probability and likelihoods, not guarantees. If something works more often than not, even though it doesn’t work all the time, it can still be very effective at generating profits.

8. The Winning Rate in Technical Analysis Should Be Higher

It’s a common myth that a high percentage of winning trades is needed for profitability. However, that is not always the case. Assume Peter makes four winning trades out of five, while Molly makes one winning trade out of five. Who is more successful? Most people would say Peter, but we don’t actually know until we get more information. Profitability is a combination of win rate and risk/reward. If Peter makes $20 on his winners but is down $80 from his one loss, he ends up with $0. If Molly makes $50 on her win and losses $10 on her losses, she walks away with $10. She is better off, even with fewer wins. Proper trade structuring allows for profitability even with few winners

The Bottom Line

Technical analysis provides a large basket of tools and concepts for trading. There are successful traders who don’t use it, and there are successful traders who do. Some believe technical analysis is the best way to trade, while others claim it is misguided and lacks a theoretical basis.

Ultimately, it is up to each trader to explore technical analysis and determine if it is right for them. It doesn’t guarantee instant profits or 100% accuracy, but for those who diligently practice the concepts, it does provide a realistic possibility of trading success.

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KINGS at PELICANS | FULL GAME HIGHLIGHTS | April 4, 2023

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De’Aaron Fox led the Kings with 23 points, 9 assists, and 5 rebounds as the Sacramento Kings defeated the New Orleans Pelicans 121-103 tonight. Keegan Murray added 21 points and 6 rebounds while Domantas Sabonis tallied his 13th triple-double of the year with 16 points, 12 rebounds, and 11 assists. Brandon Ingram led New Orleans with 22 points, 7 rebounds, and 6 assists. The Kings improve to 48-31 with the win, while the Pelicans fall to 40-39 with the loss.

With the win tonight, the Kings clinched the Pacific Division for the first time since the 2002-03 season.

With his 13th triple-double in his Kings career tonight, Domantis Sabonis ties Norm Van Lier for 3rd place in Kings franchise history for triple-doubles:
Oscar Robertson – 176
Chris Webber – 14
Norm Van Lier / Domantas Sabonis -13

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2012 NBA All-Star Game Full Highlights And Game Recap.

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) Kobe, KD and the West looked ready to deliver a quick KO.
Kevin Durant knew better.
“With all these great players on the floor, you never know what will happen,” Durant said. “Guys making big shots, and they cut it down to one. We were up 18.”
Just enough, it turned out, to hold off LeBron James and the East in the NBA All-Star game.
A bloodied Bryant scored 27 points, moving past Michael Jordan as the career scoring leader in the game, Durant had 36 in an MVP performance, and the Western Conference won 152-149 on Sunday night.
James and the East cut a 21-point deficit to one in the closing seconds, but weren’t able to move in front. James had 36 points and fellow Heat star Dwyane Wade finished with a triple-double.
“It was fun,” Durant said. “That’s the type of All-Star game you want to see.”
Blake Griffin scored 22 points for the West, which rang up 88 points in the first half, setting an All-Star record. But he won the game with his defense, picking off James’ pass when the East had a chance to tie in the final seconds.
“When I tried to throw it late, that’s what usually happens and it results in a turnover,” James said. “Definitely wish I could have that one back.”
Griffin then hit one free throw with 1.1 seconds left, and Wade was off on a 3-point attempt from the corner. He finished with 24 points, 10 rebounds and 10 assists, joining Jordan and James as the only players with All-Star game triple-doubles.
Bryant was bloodied by a hard foul from Wade and stayed in the game, but left to be evaluated afterward and did not speak to the media.
Durant’s win left Bryant tied for the All-Star record with his four MVP awards. But he got a bigger mark in his 13th All-Star game.
He broke Jordan’s record of 262 points on a dunk with 4:57 left in the third quarter and now has 271 for his career. He passed Oscar Robertson (246 points) and Kareem Abdul-Jabbar (251) earlier in the game.
“That record he got tonight, with KD in the league, I don’t know how long it’s going to last,” Wade said.
It nearly wasn’t enough, as the East’s comeback had the crowd filled with entertainers and athletes chanting for defense – never a part of the All-Star game vocabulary – in the final seconds.
James hit two long 3-pointers in the final period, and the East had a chance when Bryant, with the crowd loudly booing, missed a free throw with 18 seconds left and the West up 151-149.
But New Jersey’s Deron Williams was short on a 3-pointer, and after the East came up with it, James fired a pass into a crowd that Griffin intercepted.
On a colorful night in Orlando, from pregame performer Nicki Minaj’s pink and green hair to the neon sneakers many of the stars wore, Dwight Howard had nine points and 10 rebounds as the game’s host.
The NBA’s first All-Star game in Orlando in 20 years wasn’t close after 2 1/2 quarters. But players always say it gets competitive in the final five minutes, and James was again up for the challenge.
He hiked his scoring average to 25.9 points over his eight All-Star games, and someday he’ll probably take the record Bryant set Sunday.
But he couldn’t quite catch Kobe in the game.
“Being a competitor, no matter All-Star game or not, you don’t want to get blown out,” James said. “Of course not, when you’re going against your peers and you’re going against great players and you’re playing with great players. I just wanted to try to pick it up and see if we could make a run at it, and we did.”
With the 2-year-old Amway Center considered by many the finest arena in the league, the NBA brought its midseason showcase back to Orlando for the first time since the memorable 1992 game, when Magic Johnson was MVP three months after retiring from the league because of the HIV virus.
This one was once in jeopardy of being lost when the lockout lasted into late November. Without a settlement then, All-Star weekend may have been wiped out, as it was in 1999 following a work stoppage.
The party was saved.
James and Howard, wearing bright orange shoes, danced onto the stage for pregame introductions, Howard breaking into an enormous grin when fans gave him a thunderous ovation as the last All-Star introduced. He insists that he and Magic fans still have a love affair despite his trade request, understanding he still loves the city even if not his team, and urged everyone to ignore the trade talk for a weekend and have fun.
“We did it big for our city,” he said in brief pregame remarks to the crowd before the game.
Then Andrew Bynum blocked his first shot attempt.
The speedy Russell Westbrook had the East looking like it was standing still late in the first half, and it was 88-69 at the break.
Howard and Derrick Rose ditched their orange sneakers in the second half – James kept his – and the East quickly got back into it, trimming 12 points off its deficit in less than 6 minutes.

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Mac McClung 76ers Debut Highlights Vs Hawks

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Mac played just 7 minutes in this one, scoring 5 points off a 3 and a couple of free throws. I didn’t think he looked out of place defensively… offensively he looked pretty good aside from his 2 turnovers. He had a layup blocked in the first half that should’ve been a goal tend as it clearly hit the backboard first but he didn’t get the call.

This was the first time seeing him against an NBA teams first unit as his 2 previous games were against end of the bench guys. Defensively he was mostly guarding Bogdanovic and on offense he was mostly guarded by Trae Young. Hopefully he gets 20 plus minutes in the final game of the regular season on Sunday. 2 way guys aren’t eligible for the playoffs so that game will conclude Mac’s season.

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